AfDB’s Loan to Nigeria to Cross $8b Mark

• AfDB’s Loan to Nigeria to Cross $8b Mark

The African Development Bank (AfDB) plans to increase its loans to Nigeria by more than $2 billion next year thereby raising the total loans to the country above $8 billion mark, its President Akinwumi Adesina said.

The investment will go to energy, infrastructure and agriculture.

“The total portfolio we have in Nigeria is $6 billion. We expect that by the year 2019, we will grow that into a little bit over $8 billion,” Adesina told Bloomberg during the opening of AfDB’s headquarters in Abuja.

The Abidjan, Ivory Coast-based lender will pump more than $800 million into Nigeria this year, most of which will fund investments in power. Among them is a $250 million support to revamp power-transmission lines and electricity sub-stations as well as fund a $200 million solar-power project in Jigawa state in the north, Adesina said.

The $400 million balance from a $1 billion loan for budget support will be disbursed directly to industries identified by the government after projects have been vetted by the bank, he said.

Nigerian economy is recovering from its worst economic slump in 25 years. It will also receive budget support and public financial management assistance from the lender, he said.

The AfDB forecasts the economy will grow by 2.1 per cent this year as the output of and the price of oil, its main export, recover. The country depends on crude exports for two-thirds of government revenue and most of its foreign income. Brent crude, which compares with Nigeria’s export grades, has gained 26 percent in the past year, helping the recovery. It traded at $69.87 a barrel as of 5:03 p.m. in London.

Nigeria remains vulnerable to oil price shocks because of its dependence on the commodity. As prices continue to rally, the government of Africa’s biggest economy needs to invest more in infrastructure and boost funding to non-oil industries, which account for about 90 per cent of gross domestic product, Adesina said.